This works for me in R:
# Setting up the first inner while-loop controller, the start of the next water year
NextH2OYear <- as.POSIXlt(firstDate)
Next
Can you perhaps provide a reproducible example? What's in firstDate, and what version of R are you using? I do this kind of manipulation of POSIXlt dates quite often and it seems to work:
Sys.Date()
# [1] "2013-02-13"
date = as.POSIXlt(Sys.Date())
date$mon = date$mon + 1
as.Date(date)
# [1] "2013-03-13"